Crude oil production in Ghana, Africa’s leading gold producer, began in 2010, but output fell to a five-year low in 2023 due to production declines in existing fields, effectively erasing gains from new wells.

PIAC, a state body tasked with monitoring the sector, said oil production climbed to 24.86 million barrels by June 2024, contrasting with a 13.2% decline over the same period in 2023.

The increase was primarily driven by the Jubilee South East (JSE) project, operated by Tullow Oil (TLW.L), opens new tab, which commenced production in late 2023.

The JSE is a new find in the country’s first oil field, Jubilee where output had peaked.

“We are hopeful that the first-half output increment in 2024 will be sustained, thereby reversing the annual oil production declines,” Isaac Dwamena, coordinator of PIAC Secretariate, told Reuters on Thursday.

The half year report from PIAC also indicated a surge in petroleum revenue of around 56% year-on-year to $840.8 million by June, propelled by the increased oil output.

Ghana relies on petroleum revenue for about 7% of government income, according to PIAC.

Gas output also saw a 7.5% rise to 139.86 million standard cubic feet by June.

Dwamena highlighted the challenges faced by Ghana’s petroleum sector, which include both natural and technical issues.
Ghana’s laws stipulate that petroleum companies must allocate at least 12% of every project to the state as free and carried interest, a requirement Dwamena noted can be costly for investors.

“The state can take 15%, 20% carried interest based on negotiations, and that has been a disincentive,” he said.

To boost production, the West African country plans to sell more exploration rights to prevent stranded fossil fuels and generate revenue for its energy transition.

Current oil companies operating in Ghana include Eni (ENI.MI), opens new tab, Tullow (TLW.L), opens new tab, Kosmos (KOS.N), opens new tab, and PetroSA.

Reuters